BILL ANALYSIS �
SENATE HUMAN
SERVICES COMMITTEE
Senator Carol Liu, Chair
BILL NO: SB 930
S
AUTHOR: Evans
B
VERSION: As introduced
HEARING DATE: April 26, 2011
9
FISCAL: Appropriations
3
0
CONSULTANT:
Hailey
SUBJECT
In-home supportive services: enrollment and fingerprinting
requirements
SUMMARY
Repeals requirements that in-home IHSS recipients provide
fingerprint images and that provider timesheets include
spaces for provider and recipient fingerprints, and repeals
the prohibition against providers using a post office box
address to receive their paychecks.
ABSTRACT
Current law
1. Establishes the in-home supportive services program to
provide domestic and personal-care services to aged
individuals and to persons with a disability in order to
assist them to remain safely in their homes.
2. Establishes the Medi-Cal program through which health
care services are provided to qualified low-income persons.
Continued---
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3. Provides personal care services to IHSS recipients who
are eligible for the Medi-Cal program in lieu of providing
those services under the IHSS program.
4. Requires the State Department of Social Services (DSS),
in consultation with county welfare departments, to develop
protocols and procedures for obtaining fingerprint images
of all individuals who are being assessed or reassessed to
receive supportive services.
5. Requires that, by July 1, 2011, the standardized
timesheet used to tract the work performed by providers of
IHSS include spaces for the index fingerprints of the
provider and the recipient.
6. Requires that providers complete their enrollment form
using a physical address and prohibits their use of a post
office box address.
7. Prohibits counties from mailing providers' paychecks to
a post office box address unless the county approves a
provider request to do so.
This bill
1. Repeals the requirement that IHSS recipients provide
fingerprint images at the time of assessment or
reassessment.
2. Repeals the requirement that the standardized timesheet
include designated spaces for the index fingerprints of the
provider and the recipient.
3. Deletes the requirements and prohibitions related to
the use of a post office box address by an IHSS provider.
FISCAL IMPACT
Unknown.
BACKGROUND AND DISCUSSION
The author's purpose
According to the author, this bill is intended to repeal
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three untenable components of the "IHSS Anti-Fraud
Initiative" ABx4 19, chaptered in July of 2009. The author
states that evidence shows that these three components of
the "anti-fraud" measure are unsuccessful in addressing
potential fraudulent activity in IHSS. She writes,
"Fingerprinting of consumers and providers does not assist
in reducing fraudulent activity. Thus, the large sum
required to implement these components is nonsensical. We
must not fund an effort that lacks a sound objective but
should instead direct precious state resources to other
priorities." She also notes that there is no evidence to
support the idea that prohibiting providers from using a
post-office box to receive wages reduces fraud. This
prohibition, argues the author, has adverse consequences
for IHSS consumers.
Concerns about fraud in the IHSS system and other welfare
programs
During 2009, prompted by several county grand jury reports
alleging extensive fraud in the IHSS system and by district
attorneys' statements and public statements by
then-Governor Arnold Schwarzenegger that "some people say
there is 25 percent fraud," the Legislature adopted a set
of anti-fraud measures. This bill would repeal three of
those measures.
During that time, grand juries reported on suspected or
possible fraud in IHSS, including grand juries from Los
Angeles, Fresno, and Sacramento counties. These reports
raised specters of extensive, purposeful misuse of public
funds. Subsequent investigation into those charges has
yielded far fewer findings of fraud. While people tend to
remember the headlines when a grand jury report is
released, they may miss the report to a board of
supervisors summarizing the result of investigations.
In 2009, the Human Services Committee held an oversight
hearing on the extent of fraud and waste in public benefit
programs, including IHSS, CalWORKs, and food stamps (now
CalFresh). Representatives of DSS reported that:
? state and county quality assurance staff
performed 20,532 desk/case file reviews and 3,833
home visits during 2008. While slightly more than
13,000 required some case action, more than 10,000
of those did not result in a change of authorized
STAFF ANALYSIS OF SENATE BILL 930 (Evans) Page
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hours but rather involved a missing signature, an
expired form, or clerical errors of this nature.
These desk reviews not only identify routine case
processing discrepancies, these reviews can also
identify cases that warranted further review or
investigation, such as the provider's travel
distance being greater than 30 miles or the
provider's working in excess of 300 hours a month.
Of the cases reviewed, 557 or 2.3 percent of cases
were deemed suspicious enough to refer to
Department of Health Care Services (DHCS) for
further investigation. This referral rate is
comparable to the CalWORKs and food stamp programs
as indicated in the October through December 2007
Fraud Investigation Report, which reported 2.44
percent and 2.03 percent rate for investigation
requests for the respective programs.
Of the CalWORKs investigations completed during the period
reported, one-third of the 2.44 percent of cases deemed
suspicious (that is, 0.8 percent of all CalWORKs cases)
were found to have evidence sufficient to support an
allegation of fraud. DSS found that $8 million in
fraudulent overpayments were made during that last quarter
of 2007 and $3.6 million was recovered. Of the food stamp
investigations completed during the reporting period,
one-third of the 2.03 percent of cases deemed suspicions
(that is, 0.65 percent of all food stamp cases) were found
to have evidence sufficient to support an allegation of
fraud. DSS found that $3.75 million in fraudulent payments
were made in that quarter, and $1.7 million was recovered.
Unrecovered fraudulent overpayments in CalWORKs for the
last quarter of 2007 represented 0.58 percent of benefits
paid ($4.4 million of $753.5 million) and the unrecovered
fraudulent provision of benefits in food stamps during that
period represent 0.28 percent of food stamp benefits
provided.
According to a report released in March 2009 by the Senate
Office of Oversight and Outcomes, during a three month
period in 2008, Fresno County reviewed 639 cases of
suspected or alleged fraud and sent 58 to the district
attorney - the IHSS caseload in Fresno County is about
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15,000. During the same period, Sacramento County, which
has 16,500 IHSS cases, considered 298 IHSS fraud referrals
and substantiated fraud in seven; two went to the district
attorney.
In Los Angeles County, fraud investigations conducted
between 2005 and 2008 led to a "fraud sweep" resulting in
20 arrests. The arrests included charges of defrauding
IHSS, Medi-Cal, and SSI/SSP (benefit payments for blind,
aged, and disabled persons with qualifying incomes). Total
money loss over the multi-year period was $2,061,000;
$840,000 from the IHSS program and $1.2 million from
Medi-Cal and SSI/SSP.
Grand jury reports: broad assertions and narrow data
During the same week in 2009 that the Human Services
Committee held a hearing on IHSS quality assurance
activities, a Sacramento County grand jury released a
report "IHSS: for the needy, not the greedy."
The grand jury begins with statistics. From 2005-05
through 2006-07, Sacramento County paid $151 million to
IHSS providers. Investigations found $820,000 in
fraudulent overpayments. This represents 0.54 percent of
payments. About 10 percent of these overpayments were
recovered, according to the grand jury.
Then, the grand jury report shifted away from data to sworn
testimony. The report provides a list of fraudulent
activities that at least one witness believed has taken
place at least once within the county. The list is without
quantification or details, and the report includes no
direct quotations from witnesses' statements. Moreover,
the grand jury did not assert that these activities went
undetected, only that a witness said each activity had
occurred. The grand jury concluded, offering no evidence
in support and offering some evidence to the contrary, that
fraud is "rampant and out of control."
The grand jury chose to highlight this broad and
unsubstantiated claim in its executive summary and press
release, and the media reported on it. When public
discussion of IHSS focuses on unsubstantiated conclusions,
some people may believe that these assertions are proven
facts. It seems that the county's district attorney
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believed just that, saying at a press conference with
then-Governor Schwarzenegger that "a lot of us agree" that
IHSS fraud accounts for 25 percent of expenditures. At the
time and later, she could provide no evidence to support
her claim. Based in part on her claims and those of other
district attorneys and grand juries, the governor sought
and received an additional $26.3 million, in 2009-10, for
county district attorneys and county welfare departments to
combat fraud in IHSS.
DHCS review of suspected fraud cases
Because federal participation in the cost of IHSS services
comes through the Medicaid program, and because DHCS is
California's single state agency for Medicaid, the unit
charged with investigating reports of suspected fraud in
the IHSS program is located within that department.
Counties are instructed to refer cases of suspected fraud
to DHCS for further investigation. Until early in 2009,
this unit had two investigators. Cases awaiting
investigation piled up. DHCS reported to the Legislature
that it assigned 22 field officers in February, 2009, to
work on the backlog of suspected fraud cases, and the
overall number of permanent staff increased to five. DHCS
reports that the unit now has 19 personnel years.
Results from the recent focus on fraud in IHSS
DHCS has provided the committee with the following data
relative to current anti-fraud enforcement in the IHSS
program.
There are currently 19 personnel years attached to IHSS
fraud detection, including 14 investigators, two
supervisors, a section chief, an analyst, and an office
technician. The investigators are headquartered in San
Diego, Los Angeles, and Sacramento. The department notes
that all investigators are peace officers and or public
safety officers, responsible for protecting Medicaid
dollars, preserving program integrity, protecting and
serving the public, and take action when necessary.
DHCS reports that in June of 2010, there were 447,635
recipients of IHSS and 405,328 active providers in the
program. During the fiscal year, the department:
Received 2458 complaints (0.5 percent of the
number of recipients)
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Made 347 unannounced home visits in response to
complaints
Opened 193 criminal investigations
Closed 107 criminal investigations with no action
Referred 51 complaints to the Department of Justice
(0.01 percent of the number of recipients)
Referred 577 complaints to other agencies (0.13
percent of the number of recipients)
Initiated recovery of funds in 70 investigations
DHCS is also responsible, working in cooperation with
county district attorneys and others, for identifying
overpayments that may be the result of fraud or errors of
various kinds, including clerical. With nine counties
reporting (counties that include 70 percent of the IHSS
caseload) $4.15 million in overpayments were identified
during the fiscal year and $624,000 has been recovered.
See the table below.
---------------------------------------------
|FY 2009-10 In-Home Supportive Services |
|Overpayments |
---------------------------------------------
|---------------+--------------+-------------|
| | Identified | Recovered |
|---------------+--------------+-------------|
|Fresno | $149,263.33| $64,336.26|
|---------------+--------------+-------------|
|Imperial | $31,312.98|Not Reported |
|---------------+--------------+-------------|
|Orange | $287,932.99| $192,290.08|
|---------------+--------------+-------------|
|Riverside | $106,160.87| $12,733.00|
|---------------+--------------+-------------|
|Sacramento | $2,082,828.00| $83,709.00|
|---------------+--------------+-------------|
|San Bernardino | $190,101.94| $139,901.94|
|---------------+--------------+-------------|
|San Diego | $65,499.28| $5605.29|
|---------------+--------------+-------------|
|San Joaquin | $180,233.84| $10,809.37|
|---------------+--------------+-------------|
|Los Angeles |$1,102,004.92 | $120,126.16 |
| | | |
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|---------------+--------------+-------------|
| | | |
|---------------+--------------+-------------|
|Total | $4,145,245.36|$623,905.81 |
--------------------------------------------
The 2009-10 estimated expenditures for IHSS was $5.7
billion, including administration, and $5.3 billion
excluding administration (figures contained in the May
Revision). If the rate of overpayment in California's
remaining counties is the same as in these nine counties,
then overpayments, which include clerical errors and other
mistakes as well as fraud, represent about one-tenth of one
percent (0.1 percent) of those expenditures.
In addition, when the governor requested more than $25
million for additional personnel in district attorneys'
offices to ferret out fraud in the IHSS program, he
estimated that these new personnel would identify and seek
to recapture about $130 million (2.2 percent of IHSS's
annual appropriation). The estimate is not remotely close
to actual overpayments detected.
DHCS also reports that, since July 2009, it has partnered
with several counties and participated in IHSS task-force
operations in Los Angeles and Sacramento Counties. DHCS
investigators in Sacramento are co-located within the
district attorney's offices. DHCS has also partnered with
the State Department of Justice to deal with inventoried
fraud referrals.
Other overpayment- and fraud-detection changes nearing
implementation
The new IHSS payroll system (referred to as CMIPS-II) will
enable counties to know more quickly if an IHSS client has
been hospitalized or has died, and is therefore ineligible
for services. More rapid transmittal of those data will
reduce the opportunity to file claims for services that
were not provided. CMIPS-II is in a testing phase.
A re-evaluation of costs and benefits of measures to
prevent fraud
This bill would rescind three of the anti-fraud measures
that the Legislature adopted in a trailer bill in 2009. It
would cancel the requirement that counties secure
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fingerprint images of applicants for and recipients of IHSS
at the time of application or reapplication; it would
cancel the requirement that timesheets have a space for an
index-finger print of both the recipient and the provider
of IHSS; and, it would nullify the prohibition against
providers using a post office box for receipt of wage
checks.
The author and the bill's sponsors estimate that the first
provision will save more than $40 million needed to
purchase portable finger imaging machines. The second
provision of the bill would lead to more efficient
processing of timesheets, which, if two fingerprints were
required, would lead to thousands of claims per month being
returned to recipients due to illegible prints.
Given the slow return on investment to date of other
anti-fraud measures, the author believes that these three
costly and onerous measures are unnecessary and
counterproductive to the purpose of the program.
New anti-fraud measures that remain in statute
In addition to "quality assurance" provisions added by the
Legislature in 2004, seven of the ten measures included in
a 2009 budget trailer bill (ABx4 19, Chapter 17, statutes
of 2009-10 Fourth Extraordinary Session) would remain in
place: new provider enrollment requirements, criminal
background checks for all providers, increased data
matching with other official records, provider
acknowledgement of delivering services, provider
orientations, unannounced home visits, and fraud training
for county staff, including social workers who conduct
eligibility assessments of individuals applying for IHSS.
Arguments in support
The California State Association of Counties and the County
Welfare Directors Association write that "the incidence of
IHSS fraud is overstated." Of 24,000 cases reviewed
(including both randomly selected cases and those referred
for suspicious activity), 523 (2 percent) were referred for
further investigation and less than one percent were found
to involve fraud. These numbers were similar over each of
three years. There are better uses for government funds
than these purchases of equipment and review of
fingerprints. Many letters in support claim that there is
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no evidence that the use of post office boxes results in
higher levels of fraud.
COMMENT AND QUESTIONS
Timing
If this bill is passed, signed, and becomes law on January
1, 2012, will that be in time to stop the purchase of
portable fingerprint imaging equipment?
POSITIONS
Support: California Association of Public Authorities for
IHSS (sponsor)
Disability Rights California (co-sponsor)
United Domestic Workers of America/AFSCME
(co-sponsor)
American Civil Liberties Union
California Disability Community Action Network
California Foundation for Independent Living
Centers
California In-Home Supportive Services Consumer
Alliance
California State Association of Counties
California United Homecare Workers Union,
SEIU/AFSCME Local 4034
Coalition of California Welfare Rights
Organizations
Contra Costa County Board of Supervisors
County Welfare Directors Association
Personal Assistance Services Council of Los
Angeles County
San Francisco IHSS Public Authority
SEIU California
Western Center on Law and Poverty
1 individual
Oppose: None received
-- END --
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